Before diving deep into what the Gann Square of Nine is, we must first get to know where the term came from. William Delbert Gann or simply, W.D. Gann was a Mathematician who was known for his market forecasting abilities.
Starting to trade at the young age of 24, Gann had a reputation of being mysterious and profound. His Gann Square of Nine is an amalgam of geometry, astrology, and various math techniques from ancient civilizations.
Gann’s methods are not as direct and intuitive as the other technical indicators out there. Learning them takes time.
Compounding things further, there is no particular group or individual who is well-versed or could be called an expert on Gann’s methods.
How to Use Gann Square of Nine
The Gann Square of Nine might be the most popular among his many methods. Using the Gann chart entails replacing the starting number 1 with a number of the trader’s choosing and the step value that he or she wants. The figures that would result from it, in the Ordinal and Cardinal number cells will serve as the key resistance and support levels. These results will weather if it is sound for a trader to buy or sell into the support or resistance level it is nearest.
Most of Gann’s works are comprised of squares, circles, and triangles. Also in the mix are wheels and squares which form the applications of Gann’s methods.
Now discussing the method itself, in the Gann Square of Nine or simply, the Gann Square the price and time is squared. It gets its name primarily from the number 9 which stands for the completion of the first square.
Starting at the centre, the Gann Square of Nine is seen as a spiral of number with the primary value of “1”. From this, the value increases as the trader move in a spiral form in a clockwise movement.
Calculation
Taking into account the aforementioned, the Gann Square of Nine follows a harmonic pattern. To illustrate it clearly, let us take 54 from the sampled square, the value beside it to its right which is 29 would be derived as follows:
The square root of the value, subtracted by 2 with the result re-squared.
Ex: 54
The square root of 54 = 7.348469
7.348469-2 = 5.438469
(5.438469)2 = 29
To get the actual value, instead taking 2 out, the number is added to it. As such, 2 is added to the square root of 54 (7.348469 which equals 9.348469. When the result is re-squared, we get 87.
How the Gann Square of Nine Works
Basically, the Gann Square of Nine aids in identifying time and price alignments that ultimately brings in the forecast.
The integral numbers belong to the Cardinal Cross and the Ordinal Cross.
The numbers within the cells which the Cardinal and Ordinal Cross stand for are the key support and resistance levels.
The more pertinent numbers occur every 45 degrees on the chart.
Each of the degrees represents time.